Past balances and limits

[Anonymous]

I’m still fairly new to credit and don’t fully understand how reporting works so this may be a dumb question,

My BCE card has a limit of $2k and right now $0 balance. ( I PIF)

I at one point did have it maxed out when taking advantage of the 0% intro.

HERES MY QUESTION. I want to move all but 500 to another AMEX card but I’m wondering if the fact that I’ve had a $2k balance on a now $500 card will show up and affect my score.

[AnimatorProcrastinator]

Will it affect your scores with the bureaus? No. Will it affect Amex's internal score of you? I would assume an underwriter would see this history as poor credit management. However, Amex's CLI's are (almost) always automated and I think it will look more at your score and whether you have any baddies. I am a newbie myself to Amex so I might be wrong. Someone with more experience will come along

[jamesdwi]

depending on income and other items on your report. You can request a 3x CLI on your 61st day with the card.  Since you plan to pay in full, you can also investigate AMEX's list of Charge cards,to see if any of them meet your needs, yes they have an AF most have a signing bonus usually cover those for the first year while you evaluate the card and grow your AMEX internal limit and your BCE credit limt, and it  will deffitely grow with you and are more likely to meet your credit limit, perhaps some day I will have a crazy enough month to figure out what my internal credit limit is. 

[Anonymous]

Our OP is asking a pretty interesting question.  He's rightly observing that a few months from now his reports will show (a) a credit limit of $500 and (b) a "High Balance" of $2000.  He's wondering whether FICO or other creditors will later view that as though he once ran his card up four times his credit limit -- or perhaps to conclude that his CC issuer imposed a Credit Limit Decrease (typically only done to risky customers) on his card at some point.

That's really thoughtful on our OP's part.

I am pretty sure that no FICO model uses the High Balance field unless it's an old model and the card in question is a charge card.

I also think it is unlikely that any creditor will ever compare his HB with his current CL, but here I can't be quite as confident.  The reason for them not to do this is because transfering CLs is pretty common.  Similarly if a person's HB was $985 and limit was $5k, it wouldn't follow that he hadn't maxxed out his card in the past -- maybe that HB occured when his limit was $1000.  Thus drawing meaningful inferences from HB/CL is almost impossible to do and therefore I doubt creditors do it.

Curious to hear if anyone knows better.

[Anonymous]

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HERES MY QUESTION. I want to move all but 500 to another AMEX card but I’m wondering if the fact that I’ve had a $2k balance on a now $500 card will show up and affect my score.

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No, it won't impact your score.

Utilization only matters at any given moment in time.  If you have a $0 balance on a card, it doesn't matter if the limit is $500 or $50,000.  The fact that you had a $2000 balance on it at some point in the past isn't relevant to scoring today.  FICO scoring only looks at right now when it comes to utilization.  Your "high balance" on the card will always read $2k, but no one is going to pay that any mind and the "high balance" field has no impact on score.  Upon a MR, someone can see how your limit on the account changed over time... so, they'll see that when you had a $2k balance you also had a $2k limit (not $500) at the time. 

[Anonymous]

CGID, it looks like your reply landed a few minutes before mine.  Wouldn't it in theory be impossible for someone to run up their credit card to 4X their limit by definition?  That being said, a high balance in excess of the CL of an account could only mean that the CL of the account was at one point greater (around at least as high as the high balance) which would simply suggest that the CL on the account was reduced.  Inferences of course that point could be made under a MR, such as was the CLD self-initiated or lender-initiated.  Regardless I don't think it really would matter to anyone at all when at the current moment in time they'd of course see a $0 balance account against a $500 current limit.

[Anonymous]

There are cards that enable you to run a balance higher than your credit limit.  Personally, I think that is silly.  If the issuer says your limit is $2000 and then permits you to run your balance to $2035, then your credit was not truly limited to $2000.

But certainly you and are saying the same thing.  There are so many things that could explain a HB/CL > 1 oustide of riskiness that I am immensely doubtful that any creditor would ever try to use a high ratio in any way that could injure a consumer.

[Anonymous]

I've seen some examples of balance > limit based on interest of course.  My ex used to receive alerts all the time for "balance over limit" on her cards because she'd have them maxed out, pay the minimum (or not) and then when interest would kick in the balance would exceed the limit.  I think that's actually pretty common thing for people like her that don't have a care in the world about paying interest indefinately.  Now, a high balance of 4X one's CL... that's quite different IMO and I struggle to see a way to arrive at that outside of the obvious CLD example.

[Late2theGame]

I am no expert by any means, but imo, I can't see how any US would arrive at a good conclusion to the possible reasons a balance may have run 4x over. They are after all paid to protect their employer.

It may have been the result of a CLD initial by the CCC, or a CLD initiated by the card holder. Either one indicates some sort of change in risk. It may have been a temporary CLI for a one time purchase approved for the consumer who had always been such a great customer, a possibility, but not one they are paid to bet on.

[Anonymous]

It could be a self-initiated CLD too, I suppose.

Early this year I was toying with the idea of initiating a CLD on my Capital One QS card.  At the time I think it was sitting around a $5000 CL and my high balance on it was maybe $2k at one point.  As some members like CGID will recall, I wanted to CLD the card to $500 or $300 (whatever the lowest was they'd allow) so that I could easily play around with reported balance percentages on that single card.  I never pulled the trigger on the CLD and then the Savor was announced and I promptly did a PC to that card, turning my useless SD QS into a card that did have some category value to me.

Anyway, had I done the CLD to $300-$500, my "high balance" would have been $2k or whatever still, meaning 4X+ my limit.